Hi,

Just as a business sells its products or services as its main line of business and thus its survival; a bank has the business of lending and recovering from customers at the core of its raison d’ etre. To make the question of how do banks raise capital easier, let us think of money as the raw material for a bank’s business. If a manufacturing firm such as textile business has to assemble raw materials that start with cotton, a bank has only money that it plans to lend to its customers as its raw material.


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